Merchant Wholesaler SalesIndustry revenues is major determinant of industry value and performance. I used the U.S. Census Bureau's merchant wholesaler sales data instead of retail sales data. I found that retail sales is a better fit for the consumer discretionary industry.

Merchant Wholesaler InventoryChanges in inventory levels are an important economic indicator. Another issue with the U.S. Census Bureau's retail sales data is that inventory data is provided only for the aggregate level but not for the sub category level.General Stock Market PerformanceInvestor sentiment and economic performance and expectations influence general stock market performance which in turn influence publicly traded consumer staples companies.

Accuracy of the Consumer Staples Industry Investment Model

The below chart shows the higher correlation of the Consumer Staples Industry Investment Model versus XLP. This model also passed a backtest I conducted earlier this month.

Sources: U.S. Census Bureau, Yahoo Finance

What Is The Consumer Staples Industry worth?

Please see the below chart for the current and 2015 price estimates. I expect the XLP's price to remain roughly the same next year. The consumer staples industry as represented by the SPDR ETF XLP is fully valued.

Discussion

The National Retail Federation (NRF) announced that 2015 retail sales excluding automobiles, restaurants, and gas stations will rise 4.1%. Despite using the NRF's 2015 estimate for next year, it isn't enough to drive price growth much. Consumer staples relative to other industries is considered mature and slow growing; future growth is likely priced in.